I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

The pessimists have been the most accurate when it comes to forecasting what has happened to loser amerika in the last 12 years. "Brightsided" by Barbara Eherenrich is an amazing book about the danger of delusional positive thinking. She gives great examples to. The best one is about how positive thinking played a major role in the downfall of Lehman Bros.

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The problem in economics is that you can't run a good experiment. We never change just one thing at once, unexpected events come up, and so on. So even if you have a pretty clear cut change in, say, tax policy and you compare five years of economic data on each side of the change, you have to include the volcano that exploded in year 8 and the election in year three and so on.

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

One of the problems is that Austrian Economics eschews all data. So there is nothing to prove or disprove with Austrian Economics (and one of the reasons why Bush Sr. called it 'voodoo economics').

No they don't. Read any economist blogs and you'll see a lot of disagreement. There's huge disagreement over what to do in Europe, about fiscal stimulus, about taxes...

Now, you can say this is because the economists have become part of the political scheme and are pushing theories to match preconceived outcomes... But even then there's disagreement even if only for show.

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

It is extremely difficult to 'control' for economic factors. You can't just 'bottle-up' part of the economy and see what happens if you change something. The closest thing we have to this in the US is analyzing the impact of changes within different states.For example - Texas has a large supply of low-income workers, favorable tax rates (especially for business), and large revenue streams from exporting energy. These factors helped get them out of the recession quicker. This happened even more in the Dakotas which saw change occur faster because the population was so low. A really interesting state to watch right now is Kansas. They just changed their income taxes so that only the poor and middle class need to pay them. The wealthy and business owners can actually avoid paying state taxes on income. It will be interesting to watch how this impacts the economy of the state and how the population changes to take advantage of it.

Deneb81:No they don't. Read any economist blogs and you'll see a lot of disagreement. There's huge disagreement over what to do in Europe, about fiscal stimulus, about taxes...

Now, you can say this is because the economists have become part of the political scheme and are pushing theories to match preconceived outcomes... But even then there's disagreement even if only for show.

Chief Economist from the Heritage Foundation and the Chief Economist from the Brookings Institute approve this message.

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The most stupid people I have ever met were people that worshipped at the alter of science. Then I began to realize that they are really insecure people that are frightened by anything that's mysterious. That's especially funny when you read Einsteins quote about mysterious experiences being the peak experience for humans but then again Einstein is quite different from the arrogant tech assholes that are so numerous today.

Planet Money did a great podcast on this topic last week. Economists from the left, right, center and libertarian perspectives all pretty much agree on those things, but of course they're each a non-starter among politicos. They're going to do a follow-up on how a candidate might go about selling those things.

Bob16:The pessimists have been the most accurate when it comes to forecasting what has happened to loser amerika in the last 12 years. "Brightsided" by Barbara Eherenrich is an amazing book about the danger of delusional positive thinking. She gives great examples to. The best one is about how positive thinking played a major role in the downfall of Lehman Bros.

its not positive thinking if the facts don't support the positive. its delusional tinking and its very very dangerous. kinda like the guy who has convicinced himself that the stove top burner really isn't hot even though it is colored red. he grabs it because he's got Faith.

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

Not just an open system, but a dynamic one also. In a live dynamic system that is continually changing just because a solution worked in the past does not mean it will work right now. All you have to go on is a historical model, which is inaccurate, your calculations, and hope that you guessed correctly this time.

Bob16:born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The most stupid people I have ever met were people that worshipped at the alter of science. Then I began to realize that they are really insecure people that are frightened by anything that's mysterious. That's especially funny when you read Einsteins quote about mysterious experiences being the peak experience for humans but then again Einstein is quite different from the arrogant tech assholes that are so numerous today.

That is funny the stupidest people I've ever met are those who make negative proclamations about other people.

Linux_Yes:............ it's Corporate owned politics that makes it appear otherwise .............after all, they like things just the way they are.......

What I find really funny about the defenders of the status quo is their sheer desperation to try to convince people that it's not possible for the world to be any different than what it is. I get the impression they would have liked to see Newton come up with immutable theories about how markets and capitalism are as permanant as gravity.

BretMavrik:Planet Money did a great podcast on this topic last week. Economists from the left, right, center and libertarian perspectives all pretty much agree on those things, but of course they're each a non-starter among politicos. They're going to do a follow-up on how a candidate might go about selling those things.

I agree with them on all six of those things except for maybe numbers 3 and 4, but I do also support switching to a universal transaction tax that would sort of eliminate the corporate and personal income taxes along with the payroll tax.

Bob16:born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The most stupid people I have ever met were people that worshipped at the alter of science. Then I began to realize that they are really insecure people that are frightened by anything that's mysterious. That's especially funny when you read Einsteins quote about mysterious experiences being the peak experience for humans but then again Einstein is quite different from the arrogant tech assholes that are so numerous today.

Aww, someone feels the need to defend their superstitions.

You may have run into people who want to rely on Science, but are unable to deal with the fact that not every question is answerable. Science is a method, not a philosophy.

Q: Mr. Small Businessman, why aren't you hiring?A: Our customer demand is down, and my current staff can handle what demand we have. If I hired someone they'd have nothing to do right now.Q: Oh, well that kinda makes sense.

Q: Mr. Small Businessman, why aren't you hiring?A: Gubmint taxes! I'm being taxed so much I can't hire, wish I could, honest!Q: Aren't taxes based on profits? If you hire someone it's a tax deductible expense, and you'd pay less tax on the lower profits long after you paid the salary.A: Wharrgarble!!!

Bob16:The most stupid people I have ever met were people that worshipped at the alter of science. Then I began to realize that they are really insecure people that are frightened by anything that's mysterious. That's especially funny when you read Einsteins quote about mysterious experiences being the peak experience for humans but then again Einstein is quite different from the arrogant tech assholes that are so numerous today.

Whatever dude. I'll take someone who respects science over religion any day.

Linux_Yes:Bob16: The pessimists have been the most accurate when it comes to forecasting what has happened to loser amerika in the last 12 years. "Brightsided" by Barbara Eherenrich is an amazing book about the danger of delusional positive thinking. She gives great examples to. The best one is about how positive thinking played a major role in the downfall of Lehman Bros.

its not positive thinking if the facts don't support the positive. its delusional tinking and its very very dangerous. kinda like the guy who has convicinced himself that the stove top burner really isn't hot even though it is colored red. he grabs it because he's got Faith.

Eherenrichs point exactly. I laughed my ass off when I watched her lecture on YouTube about the book. The head of the real estate division of Lehman told his boss in 2005 that it looked like the real estate market my be headed for a downfall. They immediately fired him and "sent him to the cornfield" for not thinking happy thoughts. At least they didn't turn him into a Jack in the box.

I alone am best:madgonad: All started by the lie that is supply-side economics.

There isn't even a trickle of money going down when production is off-shored.

I think supply side economics would work much better in a closed system. Unfortunately with things like Nafta/Cafta and other trade agreements I don't think there is much hope for it.

It wouldn't even work then.

For example - look at the pre-war South. Far less trade going on. Cotton goes out and that wealth buys a lot of extravagances. Most of the economy of the South was closed.This allowed the few wealthy plantation owners to become extremely rich (off of the cheap labor of slavery), but most southerners were quite poor. Nothing 'trickled' down for them. All of the wealth was hoarded at the top. Since the luxuries were imported, the services from slaves, and the goods were from their own or other plantation owners - the wealth stayed at the top.

Q: Mr. Small Businessman, why aren't you hiring?A: Our customer demand is down, and my current staff can handle what demand we have. If I hired someone they'd have nothing to do right now.Q: Oh, well that kinda makes sense.

Q: Mr. Small Businessman, why aren't you hiring?A: Gubmint taxes! I'm being taxed so much I can't hire, wish I could, honest!Q: Aren't taxes based on profits? If you hire someone it's a tax deductible expense, and you'd pay less tax on the lower profits long after you paid the salary.A: Wharrgarble!!!

Keynes 101 vs Wharrgarble

I swear, the modern GOP is the greatest threat this nation has ever faced. They are destroying from within what no other nation could assail from without.

Can't_Think_Of_A_Name:born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The problem in economics is that you can't run a good experiment. We never change just one thing at once, unexpected events come up, and so on. So even if you have a pretty clear cut change in, say, tax policy and you compare five years of economic data on each side of the change, you have to include the volcano that exploded in year 8 and the election in year three and so on.

/DNRTFA

You can. Any good class in desgn of experiments can show you how to do this. The only problem is that Mark Twain was right. Most folks cannot interpret statistics, so you have lies, damned lies, and statistics.

Favorite I-laugh-to-keep-from-crying line I've heard repeated for the last 4 years: "The failure of the stimulus proves once and for all Keynes was wrong! Now let's cut taxes to stimulate the economy!"

The idea that Keynes was this pseudo-Marxist who called for big government and Smith was this libertarian who believed any government involvement would poison the free market is a concept whose ridiculousness is only surpassed by the fact that most of the population who know their names are certain that was the case.

Serious Black:BretMavrik: Planet Money did a great podcast on this topic last week. Economists from the left, right, center and libertarian perspectives all pretty much agree on those things, but of course they're each a non-starter among politicos. They're going to do a follow-up on how a candidate might go about selling those things.

I agree with them on all six of those things except for maybe numbers 3 and 4, but I do also support switching to a universal transaction tax that would sort of eliminate the corporate and personal income taxes along with the payroll tax.

Regarding #3, I'm not sure whether it would change your opinion on the matter but the posted article left out a part they explained in the podcast. That money would still end up being taxed if it was passed to shareholders in the form of dividends (or the sale of stock which increased in value as a result). So if the company doles out the money, it's still getting taxed, and you're probably generating more revenue that way since there are so many loopholes which allow corporations to effectively pay little to no taxes. If they reinvest the money, then it's not taxed, which is in line with what most politicians and people say they want... companies reinvesting their profits.

#4 is one of those Coke v Pepsi things, people tend to strongly prefer one or the other, but you have to go with one so do it and try to make it as straightforward and fair as possible.

madgonad:I alone am best: madgonad: All started by the lie that is supply-side economics.

There isn't even a trickle of money going down when production is off-shored.

I think supply side economics would work much better in a closed system. Unfortunately with things like Nafta/Cafta and other trade agreements I don't think there is much hope for it.

It wouldn't even work then.

For example - look at the pre-war South. Far less trade going on. Cotton goes out and that wealth buys a lot of extravagances. Most of the economy of the South was closed.This allowed the few wealthy plantation owners to become extremely rich (off of the cheap labor of slavery), but most southerners were quite poor. Nothing 'trickled' down for them. All of the wealth was hoarded at the top. Since the luxuries were imported, the services from slaves, and the goods were from their own or other plantation owners - the wealth stayed at the top.

Well, the fact that they had slaves kind of made the whole thing moot no? The only people making money where the people who owned the production, and they literally owned the whole thing including the labor. It would be better to look at 1980-1994 to see where supply side did fine. It just stopped working when we eliminated the foundation of the economy by allowing manufacturing jobs to be exported easily. Then loss of income was trickle up.

That article was a tough read. The editorial opinion of Bloomberg is a tough pill to swallow.

I'll interpret.

"We sold everything for a paper scam that is about to go belly up in a big way, but we want to keep you calm until the election. Here are some well-paid academic opinions about how creating money and handing it to banks is a great idea. We just need to keep the money we took from your paychecks and cut the services we told you we were saving it for. The well-paid experts who appear on television need to steer the debate toward not "if" the banks should get more stimulus but "How Much?" should the banks get. Your taxes need to increase too. "

born_yesterday:I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

-----------

One of the most used phrases in a macroeconomics class is "all else held equal". As in, "if you lower taxes, all else held equal, gov't revenue will go down." The problem, of course, is that all else is never held equal. And there are a zillion factors that lead to the actual effect of gov't revenue once the taxes are lowered.

So no, there are no experiments in economics. At least no clean ones that hold even remotely to the standard of "hard" sciences.

Grungehamster:Favorite I-laugh-to-keep-from-crying line I've heard repeated for the last 4 years: "The failure of the stimulus proves once and for all Keynes was wrong! Now let's cut taxes to stimulate the economy!"

The idea that Keynes was this pseudo-Marxist who called for big government and Smith was this libertarian who believed any government involvement would poison the free market is a concept whose ridiculousness is only surpassed by the fact that most of the population who know their names are certain that was the case.

This is what happens when AM Talk Radio morning drive DJs who flunked out of college take it upon themselves to teach pseudo economic theory to masses.

BretMavrik:Serious Black: BretMavrik: Planet Money did a great podcast on this topic last week. Economists from the left, right, center and libertarian perspectives all pretty much agree on those things, but of course they're each a non-starter among politicos. They're going to do a follow-up on how a candidate might go about selling those things.

I agree with them on all six of those things except for maybe numbers 3 and 4, but I do also support switching to a universal transaction tax that would sort of eliminate the corporate and personal income taxes along with the payroll tax.

Regarding #3, I'm not sure whether it would change your opinion on the matter but the posted article left out a part they explained in the podcast. That money would still end up being taxed if it was passed to shareholders in the form of dividends (or the sale of stock which increased in value as a result). So if the company doles out the money, it's still getting taxed, and you're probably generating more revenue that way since there are so many loopholes which allow corporations to effectively pay little to no taxes. If they reinvest the money, then it's not taxed, which is in line with what most politicians and people say they want... companies reinvesting their profits.

#4 is one of those Coke v Pepsi things, people tend to strongly prefer one or the other, but you have to go with one so do it and try to make it as straightforward and fair as possible.

I've read a few articles by Megan McArdle (normally a crank but sometimes on target) talking about eliminating the corporate tax and shifting it all to dividends instead. I'd be okay with that. As a pseudo-realistic position, I do support that policy, but my ideal policy regarding #3 and #4 is pretty orthogonal to it since I haven't heard anybody with any power actually propose replacing all of our transactional tax code with a simple, uniform, universal transaction tax.

Let's just say this is not a power analysis that would be accepted by any grant review committee. Which in turn makes me wonder about their other claims - they claim to include Republicans, but I haven't found their counts, or indeed any evidence that their sample is representative of the "population" they're trying to extrapolate their results to. Note that their "population" is also pretty undefined - are they trying to get a representative sample of economists? Academic economists? Academic economists with h-indicies above 18? What?

Based on the level of detail they've provided, their sample could contain as few as 2 Republicans. If this were true, then this would be a dishonest attempt to manufacture the appearance of consensus.

While the main point of the article, that there is widespread agreement among economists on a number of issues, the article itself is misleading. It discusses points of agreement among economists that Republicans disagree with, and it discusses points of agreement among economists that *both* parties disagree with, but ignores those areas where there is broad consensus among economists that only Democrats disagree with.

For example, here's a list of ten things that have a broad base of support among economists.

Rent control limits quantity/quality of housing 93 %Tariffs and quotas reduce economic welfare 93 %The United States should not restrict employers from outsourcing work to foreign countries. 90 %Floating exchange rates are effective international monetary policy 90 %The United States should eliminate agricultural subsidies 85 %The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged 85 %Large federal deficits adversely affect the economy 83 %Welfare should be administered as a negative income tax 79 %A minimum wage increases unemployment among young and unskilled workers 79 %Taxes and permits are a better way to control pollution than pollution ceilings 78 %

Note that at least three of those (indicated in bold) are issues that Democrats would not support, despite broad support from economists, but which Republicans likely would. A couple (noted in italics) are issues neither party would support.

balloot:born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

-----------

One of the most used phrases in a macroeconomics class is "all else held equal". As in, "if you lower taxes, all else held equal, gov't revenue will go down." The problem, of course, is that all else is never held equal. And there are a zillion factors that lead to the actual effect of gov't revenue once the taxes are lowered.

So no, there are no experiments in economics. At least no clean ones that hold even remotely to the standard of "hard" sciences.

I alone am best:Well, the fact that they had slaves kind of made the whole thing moot no? The only people making money where the people who owned the production, and they literally owned the whole thing including the labor. It would be better to look at 1980-1994 to see where supply side did fine. It just stopped working when we eliminated the foundation of the economy by allowing manufacturing jobs to be exported easily. Then loss of income was trickle up.

Supply side didn't do fine.

First, it was kicked off by a whole lot of repressed demand. The long recession following the 70s bottled-up a lot of demand. Then the government whipped out the credit card and borrowed at rates unheard of since WW2. That is plain old Keynesian stimulus and that kind of serious deficit spending has been providing unearned stimulus to the economy ever since. There was also a huge run-up on the stock market, which provided a lot more stimulus as paper millionaires borrowed and spent privately. In addition, the 80s was when the US started exporting dollars. Lots of dollars. That outflow of dollars brought in a lot of cheap goods which further stimulated the economy and started the trend toward off-shoring.

I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!

There's a few things in there that are true: the bank bailouts probably did save the banking industry, at a huge moral hazard. No, tax cuts do not pay for themselves, but that's not the reason for them.

But the argument that the stimulus worked is silly - it's an unfalsifiable statement because we can't create an alternative universe in which the stimulus didn't happen and compare the results. What we can do us figure out the cost of the stimulus compared to the number of jobs reported to have created - which comes out to over $200K/job. We can compare GDP and employment growth in this recession compared to past recessions to determine how effective the stimulus was - and this recovery has been far slower than others. Yes, when you spend $800B, that will create some jobs - but the question is whether the costs incurred were worth it.

And again, science does not operate by consensus. Saying X number of experts agree is next to worthless. Every economist on the planet could agree on something save one, but that one economist's theory could still be better than the "consensus" view. What matters us whether a theory fits the facts, and there is a wealth of data showing that Keynesian economic theory does not work.

Talondel:The United States should not restrict employers from outsourcing work to foreign countries. 90 %

It's funny that you specifically point out that these two things are policies no Democrat would ever support when Paul Krugman, Obammunist extraordinaire, has written about why rent control laws are bad for poor people and why free trade laws help American workers.

Eapoe6:That article was a tough read. The editorial opinion of Bloomberg is a tough pill to swallow.

I'll interpret.

"We sold everything for a paper scam that is about to go belly up in a big way, but we want to keep you calm until the election. Here are some well-paid academic opinions about how creating money and handing it to banks is a great idea. We just need to keep the money we took from your paychecks and cut the services we told you we were saving it for. The well-paid experts who appear on television need to steer the debate toward not "if" the banks should get more stimulus but "How Much?" should the banks get. Your taxes need to increase too. "

No it wasn't. You may need to take some reading comprehension classes and come back to it. Did you even try to read it?

Can't_Think_Of_A_Name:born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The problem in economics is that you can't run a good experiment. We never change just one thing at once, unexpected events come up, and so on. So even if you have a pretty clear cut change in, say, tax policy and you compare five years of economic data on each side of the change, you have to include the volcano that exploded in year 8 and the election in year three and so on.

/DNRTFA

This is an important point (although maybe overstated; sometimes data presents itself in ways that allows for good comparisons). But certainly, on the macro level, it's pretty damn lazy to say "we did X and then the economy got better, ergo X works." Very often this is the regression fallacy: people perceive cause and effect in what is nothing more than regression to the mean. When things are really bad, they tend to get better; when things are really good, they tend to get worse.

draypresct:And which "hard sciences" are you referring to? Biology? Astronomy? Can you point me towards an example of an experiment in either field that holds to a higher standard than any economics experiment?

I'd say that economics is much more of a soft science than say Physics, Chemistry, or Engineering. Those can have true experiments with controls. While there is some lab work in economics, it's largely micro level stuff (we've got one going here on bidder behavior in auctions). Macroeconomics unfortunately suffers mightily from endogeneity, which is a bit of an issue when you're attempting to get quality results from your statistical models.

That being said, I'd agree that it seems like most economics tend to believe the same things. I would say the disagreements largely come up over where each individual economist sits on the efficiency versus equity front. Most arguments in economics seems to come down to how far along that line the individual sits.

Serious Black:It's funny that you specifically point out that these two things are policies no Democrat would ever support when Paul Krugman, Obammunist extraordinaire, has written about why rent control laws are bad for poor people and why free trade laws help American workers.

Right, but Krugman is an economist not a politician (I think, I know sometimes he blurs the line these days). And last I checked that is what both the linked article and this thread are about. Politicians who don't support well established economic policy for political reasons.

I mean, Milton Friedman would have supported the majority of the things the article lists "Republicans" as opposing, but it would be moronic to use him as a counter example, because he was an economist and not a politician.

And even if you can find individual Republican or Democratic politicians that are exceptions to the rule (and they do exist, on both sides) that still wouldn't undermine the general point of the linked article or my post. Both of which are simply illustrating sound economic policies that are far outside the mainstream views of the parties.